The business entity assumption requires that an asset that is used for personal use and not for business use should not be recorded in the business balance sheet.

Question

Quizplus · Accepted Answer

The business entity assumption states that the business is a separate entity from its owners, and therefore only assets, liabilities, and equity related to the business should be recorded in the balance sheet. Personal assets or liabilities of the owners should not be included in the business balance sheet.

The Business Entity Assumption Requires That an Asset That Is